FINRA Panel Rules Firms failed to protect Investors from the actions of a Broker.
According to the Financial Industry Regulatory Authority (FINRA), a FINRA arbitration panel has ruled in favor of two Texas investors in a claim alleging two firms, LPL Financial and Financial Resources Group Investment Services, concealed the actions of a registered representative who engaged in unauthorized trading in clients’ accounts.
The investors filed the FINRA claim against LPL Financial and Financial Resources Group Investment Services in November 2020 alleging fraud, breach of fiduciary duty and unauthorized accounts and trading, among other violations, according to the FINRA award document published on July 14, 2022.
According to the allegations, LPL tried to “intentionally conceal” unauthorized changes to account and investment documents by an unnamed former registered representative that allowed for unauthorized trading and use of their funds.
The panel reportedly ordered LPL and Financial Resources to pay the family $1.66 million in compensatory damages, around $850,000 in lawyers’ fees and close to $69,000 in costs.
The defendants reportedly asked that the arbitration panel dismiss the claim with prejudice and award any relief they deemed appropriate, according to the FINRA award document.
The arbitrators dismissed all other claims, according to FINRA.
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When brokers and registered investment advisors violate securities laws, such as churning accounts or making unsuitable investment recommendations, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
This information is all publicly available and provided to you by the White Law Group. The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information on the firm and its representation of investors through FINRA arbitration, please visit our website, www.whitesecuritieslaw.com.
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Tags: Financial Resources Group Finra award, LPL Financial FINRA award, securities fraud attorneys Last modified: December 8, 2022